Tuesday, August 04, 2009
Dear Energy Professional, Dear Colleagues,
Your writer is happy to learn the announcement of new thermal power plant investment in Tekirdag to utilize nearby Saray low LHV local lignite mine.
We understand that Lahmeyer Engineering Company of Germany has prepared the bankable feasibility study for the new investment project to attract foreign funding. IMC Mining Consultants are also preparing the bankable feasibility for the Saray coal mine.
Local investor has acquired 30- year concession rights for exploitation of Tekirdag Saray lignite mine reserves, comprising the sectors in EdirKoy, KucukYoncali and SefaAlan, with estimated lignite reserves of 129 million metric tons. The mine is located 150-km north west of Istanbul.
Average Humidity in the available lignite is 42%, ash is 24%, suphur is between 1.1-1.8%, LHV is between 1700-2000 kcal per kg. Coal mine average thickness is 3 meters at about 40 meters average dept.
Local reputable Turkish local company is planning to install a new thermal power plant to generate 2x 150 MWe electricity based on CFB technology and sell the generated electricity in IPP scheme. They have already received their investment license from the Local Regulatory Board, EMRA.
However EIA permission is not granted yet. Prior to their EIA application, they will be organizing "Public Information Meeting". Details are in their web site.
Your writer feels happy to get such news on new energy investments in our local energy market, provided that
- They are environmentally friendly,
- They have completed all obligations for Environmental Impact Assessment Reports,
- They receive their license from the Local Regulatory Board,
- designed by local engineering companies or in-house engineering department as much as possible,
- fabricated in the local fabrication plants as much as possible,
- installed by our local contractors,
- commissioned and supervised by our local engineering power,
- operated by our own local staff, and
- Regularly checked by our own Labor force in programmed maintenance.
Your writer sincerely feels that energy investors deserve all our support to complete those power plant investments. They deserve since they risk their own property in order to get proper "Corporate Financing" at reasonable interest rates, and payment terms.
They will be investing 480 million USD equivalent money, which is a huge sum to finance.
Hence your writer also tries to avoid them to make any technical mistakes in their power plant design, furthermore to avoid incorrect selection of the necessary equipment, wishes them to operate the plant for many years, to generate electricity which will push our economic prosperity.
After reading the Project Information in their web page, we feel that they are prepared quite good on their behalf. However there are not much project details; only already known general information is disclosed.
We learn that the output capacity is 2x150 MWe. From the video in their web site, we understand that they will install air cooled cooling system. That means they will not use much underground water. That is good for nearby ongoing agricultural activities. As a matter of fact, water is scarce at the neighboring site.
We do not know details of manufacturer for the selected steam turbine, CFB technology, cooling system, heat balance diagrams, fabrication, construction, site installation contractors, whether they are local or foreign, details of budget figures for each item, the timetable for project execution.
It is your writer's humble feeling that we should help and warn the investor not to repeat negative past examples in Antalya, Denizli, Bandirma, Amasra, Yatagan, Yenikoy, Kemerkoy, Afsin.
Foreign investor should be comfortable here that we are ready to help them. We should warn that they should not involve any corruption for speeding the public procedures, getting licenses, getting EIA approvals.
Local investor should feel comfortable that we shall be warning them in proper design, sourcing fabrication, site installation, logistics, and public approvals.
We all expect that these energy investments will bring prosperity, employment and peace to the site. Maximized manpower, maximized engineering/ fabrication/ site installation capabilities will be employed.
After brief review of the project, we feel that we need answers to the following question,
- We need to learn the origins of the basic equipment, steam turbine, CFB steam generator, condenser, cooling tower.
- What are the budget figures? When are they going to be delivered to site? How are they transported from which sea port?
- Who will be designing (CFB, CMEC China?) , who will be the fabricator , who will be the construction company for site installation?
- It is our understanding that they have not applied yet to EIA certification or to the Local regulatory board for licensing.
- There should not be any deviation of the information they will be declaring in the local information meeting and the information they will be furnishing to the public administrations.
- We would be too pleased to learn the details of CFB design, supplementary firing burners, burner management systems, emission controls. Local emission limitations are not so stringent. They should be all in compliance with EU standards.
- We shall be too pleased to learn where they will be purchasing the cooling towers, air cooling system design and equipment.
- We need to know who will be the site constructor, what is the budget figure? They should be local companies. Local labors will be at the site. If you promise to have employment for 1500 workers, and then you should avoid to bring Chinese workers.
- We need to know the project period, the importance milestones; we expect that 36-40 months could be a reasonable period.
- We need to know who will be making and paying the new 380 kV transmission and new natural gas incoming pipeline to the site.
- We need to know when the major equipment land transportation will be made; do we have sufficient roads for that transportation, which will be making the road reinforcement to enable the transportation?
- Do they have long term electricity sale agreements with TETAS?
- Do they consider any capacity extension in the long term in 10-20 years time? Do they have enough space/ land for that extension??
- Do investors consider any IGCC application in future by gasification of indigenous lignite mines based on clean coal technologies?
- Will there be any option for "BioMass Cofiring" of the Saray lignite with nearby municipality Saray, Tekirdag refuse after recycling?
- Generally we observe that after plant construction and generation of income in 3-5 years, the foreign party decides to sell her shares to the local partner and leave the project/ country. That was the case in Enron in Trakya, selling all her shares to her local partner, Steag in Sugozu. How is the long term policy of the investors in this case?
- Could Local Chamber of Mechanical Engineers organize annual technical tours for members and ME students to the site in future?
- We will be too pleased to learn if the local party will be thinking to create local engineering department to carry out necessary basic engineering in the long term.
Your writer hopes all the best, and the success to the investors in their new venture
Haluk Direskeneli, Prinkipo based Energy Analyst